FXCM Acquire ODL Group


Last night The Daily Telegraph reported that British forex broker ODL Group Ltd. has "agreed on terms to be acquired" by FXCM Holdings LLC. It looks as though the new brand of the combined organization in Europe is going to be "ODL Powered by FXCM – Bigger, Better, Stronger"

According to the Telegraph:

The founders of one of Britain's largest retail foreign exchange brokers have agreed to a takeover by a US rival as part of an ambitious plan to take on some of the biggest players in the highly-lucrative online trading market.

ODL Group's largest shareholders, Graham Wellesley and Lorenzo Naldini, have sold the business in which they own more than a 50pc stake to US-based global foreign exchange broker FXCM Holdings to create a business employing around 1,000 staff. Mr Wellesley… and Mr Naldini will remain partners with responsibility for overseeing the European operations.

This follows on from FXCM acquiring ODL's ill fated American venture early last year.  This morning ODL's UK customers received an email informing them of the news, and directing them to a variety of new pages on the ODL website which endeavour to explain what will be happening to their accounts. FXCM, as implied by it's full name (Forex Capital Markets), is currently largely a foreign exchange business. By acquiring ODL they not only gain a big increase in their European presence, they also gain an equities, futures and options business which comes complete with membership of the London Stock Exchange and NYSE Euronext.

To summarize the impact on existing ODL customers:

  • "No changes are being planned for equities, futures and options trading. We plan to continue supporting the MyBroker and the Strategy Runner trading platforms."
  • If you're currently a user of ODL's Ariel platform then "You will soon be contacted by an FXCM institutional sales representative or your ODL institutional sales representative. You may continue to deposit and withdraw funds following current procedures."
  • If you're a MetaTrader 4 user there will be some changes. "Your MT4 account will be upgraded to No Dealing Desk execution on forex instruments and No Re-Quote trading on CFD instruments in the coming weeks. You will continue to trade with the same installation of MT4 that is currently on your computer and your current username and password will not change. An additional username and password for the FX Trading Station — used to run official account records—will be e-mailed to you shortly". In addition there are changes to margin requirements, margin call policy, and some less popular products are being discontinued.
  • Last but not least, if you're an ODL spread betting client then "in mid-to-late May, we plan to replace the existing spread betting platform with the FXCM Trading Station II. It has great features like the ability to trade directly from charts and one-click order execution". FXCM neglect to mention what seems to me to be a great advantage of this change for ODL spreadbetters. Once they have been migrated to Trading Station II they will be able to automate their trading strategies if they so desire, using one of FXCM's APIs.

Whichever way you look at it, it's an exciting time for us UK customers of the company once known simply as Options Direct Ltd. How times have changed, always assuming that "final due diligence and regulatory approval" don't throw a last minute spanner in the works that is!

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May 6, 2010

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